Oil on the Brain

Adventures from the Pump to the Pipeline
Published:   January 2007
ISBN: 0385511450 | 336 pages
A wonderfully readable portrait of the fascinating and surprisingly little-known human face of Big Oil.

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Oil on the Brain is a smart, surprisingly funny account of the oil industry -- the people, economies, and pipelines that bring us petroleum, brilliantly illuminating a world we encounter every day.

Americans buy 10,000 gallons of gasoline a second, without giving it much of a thought. Where does all this gas come from? Lisa Margonelli’s desire to learn took her on a one-hundred thousand mile journey from her local gas station to oil fields half a world away. In search of the truth behind the myths, she wriggled her way into some of the most off-limits places on earth: the Strategic Petroleum Reserve, the New York Mercantile Exchange’s crude oil market, oil fields from Venezuela, to Texas, to Chad, and even an Iranian oil platform where the United States fought a forgotten one-day battle.

In a story by turns surreal and alarming, Margonelli meets lonely workers on a Texas drilling rig, an oil analyst who almost gave birth on the NYMEX trading floor, Chadian villagers who are said to wander the oil fields in the guise of lions, a Nigerian warlord who changed the world price of oil with a single cell phone call, and Shanghai bureaucrats who dream of creating a new Detroit.

Deftly piecing together the mammoth economy of oil, Margonelli finds a series of stark warning signs for American drivers.

On Feb. 12, Margonelli spoke at New America about her book and the insights she formed while writing it; video of this event is available here. To learn more about this book -- and see photos, timelines and additional data on the global oil economy -- please go to oilonthebrain.com.

Selected reviews are included below.

The New York Times

Sunday, March 11, 2007

There's a lot of stuff we consume while barely pausing to consider where it comes from; it is easy, these days, to be insulated from production. Inquisitive writers profitably explore the knowledge gap: recent work about the life stories of handguns, French fries and Panama hats comes to mind. Tracy Kidder chronicled the creation of a computer in "The Soul of a New Machine," and last year Michael Pollan traced the sources of our dinners in "The Omnivore's Dilemma." This year comes something new about those obscure practicalities of how does it get here: "Oil on the Brain," by Lisa Margonelli.

It's a great subject because oil is at once so familiar (the average American uses about three gallons of gasoline a day) and so obscure -- how many of us have any idea where, exactly, our gas comes from, or how it was transformed from crude with a name like "light sweet" to the flammable cocktail we pump into our tanks? What other product is so much a part of our personal lives and so implicated in our foreign policy? As China and India spawn vast middle classes that want to drive cars, and as Hugo Chavez of Venezuela thumbs his nose at his largest customer, the United States, global oil supplies seem more precarious, and their provision more contentious, than ever before.

Margonelli, a fellow at the New America Foundation (and recently a guest columnist for The New York Times on the Web), says she got taken with the subject while in Prudhoe Bay, researching a story on new methods for the cleanup of oil spills. She watched a chemist ignite spilled crude with a baggie of napalm, and heard him expound on oil fields' "ever-changing stew of complex compounds, endlessly unpredictable and absorbing. He began musing about the components of crude, from the light gassy hydrocarbons to the heavy gooey ones: All of them have distinct personalities." And she was hooked.

The specialized knowledge of those who deal with oil is mainly what Margonelli sets out to channel in these pages. She traces the chain backward, from a San Francisco gas station near her home to the trucks of a jobber, or oil wholesaler, to a refinery south of Los Angeles, and then to a drilling rig in East Texas. Margonelli intrepidly loiters around the gas station at all hours, climbs aboard a tanker truck making oil deliveries and lucks into an emergency during her visit to the refinery, observing carefully and asking lots of questions when sirens sound and production halts. Her approach is quirky but comprehensive, informal but rigorous: Margonelli has a facility with numbers and an easy way with questions of policy, and the narrative passages here, lightly first-person and often funny, help make accessible the facts of our dependence on oil. Visits to the Strategic Petroleum Reserve near the Gulf of Mexico and the New York Mercantile Exchange round out the American half of the book.

She could have stopped there. But 60 percent of America's oil is now imported, and Margonelli is ambitious: she next visits four petrostates (Venezuela, Chad, Iran and Nigeria) and China, where oil suddenly matters a lot. Oil has enriched each of the petrostates, of course, just as it enriched Pennsylvania, then Texas, then Alaska, but there the similarities end; in Margonelli's telling, oil has brought corruption in Chad; corruption, environmental disaster and political instability in Nigeria; a new strongman in Venezuela; extremism in Iran; and everywhere the widespread loss of national sovereignty to oil companies and international lenders -- what Margonelli calls "the external locus of control." A Chadian recounts a debate in the country's new Parliament over the coming of oil -- they had seen it start wars in Sudan and Libya, he recalls, and were fearful. A man had stood up and said something like: "In my area there is a certain type of bird. When you see that bird in the forest, you know you will lose either your mum or your dad. This is the case with petroleum. ... Oil means that something will change -- you cannot choose if it's your mother or your father who will die. Something bad will happen whether you like it or not."

Needless to say, this was not quite the scenario faced by Jed Clampett, the Beverly Hillbilly, when "black gold" burbled up from his property in the Ozarks. Oil's enduring mystique in our country, the romance of Texas wildcatters and giant gas-guzzling cars, runs up against an effective foil in the overseas chapters, where we're forced to confront how we get oil now. Petroleum has not solved poverty, and its production abroad is garbed in realpolitik and lots of nastiness.

Unfortunately, these chapters feel cut from a different cloth. While Margonelli spent days with a drilling rig's "mud logger" in Texas, collecting his every folksy expression ("Put a dress on that pig and take it to the fair"), once out of the United States she's more inclined to skim -- conducting quick interviews in the manner of a foreign correspondent writing a feature. Well-drawn characters whom we got to know over many pages in the book's first half -- oil people Margonelli got to know by sitting in on their lives -- cede to a new set who, a day after finishing the book, I have some trouble recalling. For the first time, in Iran, Margonelli describes her hotel room, the hotel's breakfast room, her own awkward appearance in a big blue dress -- she has stalled!

However, she turns this chapter around. It becomes one of the best in the book because of the passions Margonelli gets embroiled in. Everyone here seems to feel strongly about something. An American sailor who has done five tours in the gulf region, and took part in the shelling of an Iranian oil platform in 1988 during the Iran-Iraq war, says he was "shocked to be fighting Iraq after protecting them from Iran in '88. If we'd predicted that, we should have let the Iranians take 'em down."

Even better is a fellow journalist. Aresu Eqbali, a friend of a friend of a friend, helped Margonelli set up interviews from afar, and then accompanied her on a visit to Iranian oil platforms in the Persian Gulf. "In her mid-30s, she wears an olive drab coat and head scarf and deep red lipstick, which reflects her stealthy sense of humor. Disguised as a staid oil reporter, she's got a mocking sense of the absurd, anger and a taste for old-fashioned, mildly dirty jokes."

The two fly by helicopter to a platform that was bombed by Iraq during the war. "Tiny boxes stick above the surface of the sea, reminding me of dental work -- little bridges and crowns," Margonelli writes as they approach from the air. She looks at girders melted by the bombing, still unrepaired, and observes, "I'm trying to imagine the inferno of the platform burning, but there's ice in my cup, and the rosewater reminds me of the sachets my grandmother used to put in with her clothes." She describes men they meet later as "cheerfully submissive to the platform, as if they've married someone far larger and more powerful than themselves."

The women are greeted by an ebullient character named Mr. Ebrahimi, who gives them a tour of another platform, known as Salman Complex, "my home of 20 years." But Ebrahimi's cheeriness soon gives way to seething anger as he describes the day American warships attacked the lightly armed platform. The Marines gave little warning, and platform employees had to jump into the shark-infested water, some without life jackets. "We couldn't defend. I myself was in the middle of the sea, with no gun. It upsets you; it makes you full of hatred." A manager named Aslani grows even more distraught recalling American attacks, and Aresu has to start poking Margonelli to get her to end the interview.

The fury leaves a big impression on the author. "For me, the abiding lesson of Operation Praying Mantis" -- in which Americans attacked the platforms -- "is Aslani's anger. Winning, particularly in the politics of the petrostate, is little more than the start of a long war." In other words, these battles have not supplied us with a new beginning. Iran is still there, with its large share of the Middle East's 57 percent of the world's oil reserves, and 45 percent of its natural gas. Margonelli notes that President Bush promised last year to "make our dependence on Middle Eastern oil a thing of the past" by 2025. "Even if that is possible, which I doubt," she says, "we still have 19 years of living together left."

The short final chapter, on China, begins with a recitation of figures on China's exploding smog problem, car industry and thirst for oil. Then quickly we're in Shanghai, where the book abruptly concludes with an account of a competition for alternative-fuel and low-emission vehicles. These are hardly visible in China now, and the chapter feels disconnected from the pages that have come before it -- until, in her epilogue, Margonelli segues into reflections on the need to reform our relationship with oil.

"The one lesson I've learned from writing this book is that there is no such thing as cheap gas," she says. New strategies are needed to steer us toward "many fuels, not just one." The challenges are technological but also political. "Oil diplomacy, long outsourced to oil companies, and increasingly to the U.S. military, needs attention and leadership. The special relationships the United States nurtured with countries like Venezuela and the security guarantees offered to Saudi Arabia have lost their appeal; and the threats, which include sanctions and military intervention, have lost their effect."

Daniel Yergin's magisterial book, "The Prize" (1991), remains unsurpassed as a modern history of oil. But "Oil on the Brain," kaleidoscopic, accessible and focused on our present quandary, is a timely sequel. --Ted Conover

The National Post (Canada)

Sunday, March 11, 2007
For weeks, drivers in central Canada have been worrying about their next fill-up, lining up at the pumps to pay skyrocketing prices for fuel when they can find it. For the first time in years we have seen stations run dry and rationing in those with supplies. Although the shortage was temporary and caused by a freakish combination of events -- problems at two refineries coupled with a train workers' strike -- it nonetheless should serve as a long overdue wake-up call: We can't go on like this.

All this provides new pertinence to Oil on the Brain, Lisa Margonelli's timely examination of how the stuff we use to fuel our cars gets from producer to consumer, and the price we pay, in every sense of the word.

Her jumping-off point is the place where most people encounter gasoline -- the service station. Then she works backward through the refinery to the drill site and the offshore platform. There are visits to the New York Mercantile Exchange and producing countries Venezuela, Chad, Iran and Nigeria. A chapter on China looks to the future as millions of people vie for the right to own four wheels, not just two.

Like a novel that starts in the present and progresses backward and forward, it's a device that seems counterintuitive, but it works.

Ms. Margonelli, a former columnist at the San Francisco Chronicle, now a fellow at the New America Foundation, knows how to spin a tale and has an eye for the surprising detail. In addition, she can take reams of arcane information and transform it into informative prose that keep readers turning the pages.

She tells you how a refinery works, while also noting the straggly geraniums nurtured in window boxes by lonely Iranian workers on an oil platform in the Persian Gulf. A drill bit is "a frightening lump of metal: brassy, resembling the maw of a housefly magnified to the size of a football helmet."

It also helps that the oil business has attracted more than its fair share of larger- than-life characters -- among them C.D. Roper, a fourth-generation Texas oilman, who says he's lost "$200,000 so many times it seems reasonable," and the legendary wildcatter, Michel Halbouty. "People. Don't. Care," he tells the author about the cost of gas. So long as they can pull up at the pumps and fill 'er up. The United States has never had an energy policy, he adds.

Repeatedly, Ms. Margonelli delights with her razor-sharp observations. At the NYMEX, she notes some traders wear safety glasses. "Some guy down there probably lost an eye," figures one, mentioning an unsuspected job hazard. The workers at the U.S.'s top-secret Strategic Petroleum Reserve (it turns out to be near Lake Jackson, Tex.) are forbidden to feed their lunch to the local alligators. Visitors get pound cake.

The least successful parts of the book are her trips to the oil-producing nations. This is partly because they are well-trodden territory, the subject of countless feature articles and film or TV documentaries, and in many cases her information has been overtaken by events.

Pundits may sneer that the oil business has been written about ad nauseam. But for all those car drivers who don't know their upstream from their downstream, Oil on the Brain is a fun read that's also thought-provoking. -- Araminta Wordsworth

 

The Atlanta Journal-Constitution

Sunday, Feb. 18, 2007
Like many journalists, Lisa Margonelli knows a little bit about a lot of topics. Like many freelance writers, she moves from one unrelated topic to another, depending on what strikes her fancy and on what an editor will buy.

On Oct. 28, 2002, Margonelli took a fancy to writing about oil. The result is a book in which she shows she knows a lot about one topic. Those who read to the end of the simultaneously breezy and serious book will know a lot, too.

Here is what happened on that October day more than four years ago: Margonelli had traveled to Prudhoe Bay in Alaska to observe an experiment aimed at cleaning up oil spills. The chemist conducting the experiment set the spilled oil aflame with napalm. The oil on the water "blazed up violently, cracking and whirring as the hydrocarbon bonds broke."Oil died as an abstraction in her mind that day. She began to think of the substance from below the Earth's surface "as a mythic molecule --- powerful, violent and charismatic --- capable of running the world."

Margonelli, who lives in Oakland, Calif., decided she would travel the globe "to hear stories from the people who oversee oil's long journey to our cars." She wanted to understand oil in a deeper manner than the fluctuating price of its derivative, gasoline, at the service station pump.

Before writing the book, Margonelli hung out at a local service station; with the driver of a tanker truck; with the women and men who operate an ugly, polluting California refinery; with roughnecks operating the drills in a remote Texas field; with guardians of the Strategic Petroleum Reserve along the Texas Gulf Coast; traders on the New York Mercantile Exchange; and all manner of folks in Venezuela, Chad, Iran and Nigeria --- all nations supplying the black gold to an addicted U.S. population as well as an increasingly addicted China.

The structure of Margonelli's narrative is unexpected, even daring, as she works backward along the demand-supply chain. She starts the book at the service station pump, because it's the most familiar manifestation to the largest number of readers. Then she tackles the distribution, refining and drilling, in that order.

Throughout the book, Margonelli foreshadows mystery.

"Nothing was as I expected," she writes of a gas station, a seemingly familiar and uncomplicated site. "The one thing I thought I had a handle on --- the price of gasoline, which is updated frequently and displayed prominently on large signs --- turned out to be a chimera, albeit a fascinating one that reveals much about the behavior of American gasoline consumers and our role in the world."

While oil never leaves center stage, Margonelli does a masterful job of humanizing its passage from underground to pump handle. The manager of the San Francisco gas station, identified as B.J., is unforgettable. He appears drowsy but actually sees everything that is going on. The alertness is necessary, given customers who might otherwise drive away without paying or shoplift convenience store items that pay the bills.

Even more unforgettable is the owner of the station, Michael Gharib. He must make snap decisions every day, sometimes hour by hour, about whether to purchase his next shipment from a certain refinery, from a certain wholesaler or from nobody right now in case the price drops a few minutes later.

By the time Margonelli finished locating and interviewing the fascinating characters, she had traveled about 100,000 miles over a three-year span, burning about 3,000 gallons of fuel in the process.

After all that traveling, she realized that the price at the pump tells an interesting story but also obscures a great deal. Margonelli thinks of the price, a mere number, as concealing lots of specific stories about people and one general story: "As the rate of demand has grown faster than supply, risks and prices have risen. The balance of power in the oil market has shifted."

Margonelli ends her book with a call to action, suggesting not only changes individuals can make but also sweeping reforms that "will require American leaders with the guts to abandon the status quo and look toward the future with a critical and strategic eye."

"There is no reason to imagine," she insists, "that the only ending to the oil story is a frantic and brutal scramble for resources dominated by an increasingly craven 'addicted' United States." -- Steve Weinberg

San Francisco Chronicle

Sunday, Feb. 4, 2007
Nine-tenths of a cent. What's that about? It won't buy you a piece of penny candy, but it will buy you a gallon of gasoline, along with 200 or 300 more pennies.

It's called the hidden penny. Not that it's a penny, since it comes up short, and not that it's hidden, since something so puzzling is unlikely to escape notice. Yet it is equally unlikely that we give it much thought. That suits the oil companies just fine: Each year, that near-penny adds $1.26 billion to their coffers. That's a lot of penny candy.

Surprising nuggets such as the hidden penny come by the fistful in "Oil on the Brain," Lisa Margonelli's illuminating, entertaining stories of "people who oversee oil's long journey to our cars." Starting at her neighborhood filling station, she scurries up the pump like Alice down the rabbit hole, to discover and chronicle the delivery trucks, refineries, drilling rigs, the Strategic Petroleum Reserve, the oil market and, most tellingly, the voracious consumers, who daily go about changing the world with as much concern as they give that hidden penny.

Simply put, oil rules. It is an indispensable part of our omnivorous diet: meat, vegetables, fruit, grain, nuts, petroleum. Our nation's infrastructure of roadways and interstates is a result of oil. It fuels our military and our economy. We will go to war over access to it, and our foreign policy will bend to its demands. It keeps us on the go. And, often enough, we are going to the gas station.

In the background are the great energy oligopolies, but the object of our immediate ire, when gasoline prices tick up another dime or quarter, is the filling station. We live by our cars. When we are denied, as during times of shortage or embargo, our very characters are compromised. "The whole definition of being American was that we drove our cars anywhere we wanted to. Public transit and waiting in line was something communists did," writes Margonelli, tongue in cheek.

In Margonelli's colorful profile of her local gas station, the proprietor is to be pitied rather than scorned. For these establishments, gas is more a loss leader than a windfall. The buying and selling of gas has become an alchemist's art, and if 5 cents is made on a gallon sale, then sing hallelujah. Any significant profits come from impulse buys. Forget the gallon of gas; it's the gallon of soda that pays the bills, along with sunglasses, candy and salted whatevers.

Margonelli next hitches a high and jouncy ride with a truck driver named Roger as he negotiates his shiny tanker truck through the misery of Los Angeles traffic to get the goods to stations before they run dry. His is another thankless job in keeping the country in a flow state. He works an absurd number of hours a week. This is where readers get more closely acquainted with the refined stuff, with gasoline's iridescent sheen and bewitching fumes.

On to a sulfurous tour of a refinery, the wild wheelings and dealings of the crude market, an outlandish week at a wildcat rig in east Texas -- where the epic geologic story of oil comes into focus, with its faults and folds and sedimentation and metamorphosis "as compelling as subplots in Russian literature" -- and then a visit to the Strategic Petroleum Reserve, our emergency stockpile against the political weather of big oil, which wouldn't serve national needs for more than a few days but bespeaks how large is our need, how deep our fears and how oil can be used as a political football.

Running through the book, subterranean but ever present, is our preposterous relationship to oil, an institutionalized addiction that discourages strategic change. We feed the rat instead of setting a trap for it.

Today's petro-states are hazards in themselves: Margonelli's portraits of Venezuela, Chad, Iran and Nigeria are cases in point. "Lurking within [those countries] were instability, poverty, nationalism, and deep anti-American feelings. The 2001 National Energy Policy, written after secret consultations between Vice President Dick Cheney and oil executives, concluded as much. ... Many people interpret it as a virtual declaration of war." Weapons of mass destruction don't have to be bombs; oil fits the bill quite nicely.

Oil is our mythic molecule: powerful, violent, charismatic, crudely valuable. It has spawned a culture of warlords, petro-traffickers, pirates, SUVs and 10,000-square-foot homes. It is an outsize story, both hateful and pathetic, and ably drawn by Margonelli.

Still, to end on a positive note, petroleum saved the whales, at least for a while. Whale oil was once the gold standard for indoor lighting, and whales were hunted with abandon. A gusher in Pennsylvania put an end to that, just as it opened a whole new can of slippery worms. --Peter Lewis


Additional Praise for Oil on the Brain

"Oil on the Brain is hugely enjoyable, compulsively readable, and brilliantly reported. I feared reading a book on oil would be akin to being told 'eat your carrots.' But from page one, Lisa Margonelli made oil into brain candy, and kept it so till the end."
--Po Bronson

"Lisa Margonelli has a rare and precious talent. She has drawn a wonderfully readable portrait of the fascinating and surprisingly little-known human face of Big Oil."
--Simon Winchester

"Oil on the Brain could be called "The Petro-economy for Dummies"--and especially hardcore dummies like me who insist on being entertained as well as educated. From the corner gas station to the oil fields of Nigeria, there couldn't be a better traveling companion than Margonelli. She's fast, fearless, funny, and a brilliant observer."
--Barbara Ehrenreich

“Very few people are smart enough to tackle a subject as complicated as world oil, and of those people, I would wager that not one of them could do it with the humor and crackle and delight that Margonelli brings to bear. If you drive a car, you must read this book, but please not at the same time.”
--Mary Roach, author of Spook and Stiff

"Oil on the Brain is an original, open-minded look at a subject about which everyone has an opinion."
--Publishers Weekly (starred review)

"Filled with rich history, industry anecdotes, and politics, Margonelli's book brings a deeper appreciation of the complicated and often tenuous process that we take for granted every time we fill up our tank."
--Booklist